Cowan v. Ohio Dept. of Jobs & Family Servs. , 2021 Ohio 1798 ( 2021 )

[Cite as Cowan v. Ohio Dept. of Jobs & Family Servs., 2021-Ohio-1798.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO
MARY COWAN, : APPEAL NO. C-200025
TRIAL NO. A-1901563
Appellant, :
: O P I N I O N.
vs.
:
OHIO DEPARTMENT OF JOB AND :
FAMILY SERVICES,
:
Appellee.
:
Civil Appeal From: Hamilton County Court of Common Pleas
Judgment Appealed From Is: Affirmed
Date of Judgment Entry on Appeal: May 26, 2021
sb2 inc., Amy C. Baughman, for Appellant,
Dave Yost, Ohio Attorney General, and Amy R. Goldstein, Assistant Attorney
General, Health and Human Services Section, for Appellee.
OHIO FIRST DISTRICT COURT OF APPEALS
BERGERON, Judge.
{¶1} A nursing home resident was denied Medicaid benefits because she
owned two parcels of land valued at $6,000, exceeding the $2,000 resource limit.
She appealed to the common pleas court, seeking to exclude the parcels because no
one wanted to buy the land (she ultimately gave the land away). The case took a
jurisdictional detour, however, when the trial court dismissed the resident’s appeal
for lack of jurisdiction, reasoning that her authorized representative lacked standing
to pursue the matter. But in the event we saw things differently on jurisdiction, the
trial court alternatively affirmed the Medicaid denial because the resident had the
legal ability to access (and liquidate) the property. We conclude that the trial court
erred with respect to jurisdiction because the resident pursued this appeal in her own
name and never made the authorized representative a party to the proceedings.
Nevertheless, we affirm the trial court’s alternative holding that the resident’s
property was a countable resource.
I.
{¶2} In September 2017, appellant Mary Cowan was admitted to
Carespring, a long-term nursing facility. However, Ms. Cowan soon needed
assistance with paying for her care, so, at the behest of the facility, she applied for
Medicaid benefits. To facilitate this process, Ms. Cowan signed a “Designation of
Authorized Representative” form, granting Carespring authority to submit her
application, participate in eligibility reviews, and take necessary actions to establish
eligibility. Ms. Cowan also provided Carespring permission to pursue legal action in
her name or in Carespring’s name—even waiving potential conflicts of interest.
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OHIO FIRST DISTRICT COURT OF APPEALS
{¶3} Ultimately, the Ohio Department of Job and Family Services (ODJFS)
denied Ms. Cowan’s Medicaid application on the ground that her assets exceeded the
resource limit. Ms. Cowan owned two parcels of land that the county auditor valued
at $3,000 each, and that she had listed for sale. Unless an exclusion applies, Ohio’s
Medicaid guidelines provide that individuals are not eligible for benefits if the value
of their personal and real property exceeds $2,000. And because no exclusion
applied here, the $6,000 value assessed by the county auditor exceeded the
regulatory threshold. Although some evidence suggests that the auditor overvalued
the two plots, that issue is not before us. As relevant here, Ms. Cowan argued that
her property should not count as a resource because she could not locate a buyer.1
ODJFS disagreed and, after exhausting her administrative appeals, Ms. Cowan
appealed to the common pleas court pursuant to R.C. 5101.35(E).
{¶4} At the trial court, however, this case shifted focus to standing and
jurisdictional concerns. ODJFS began challenging Carespring’s involvement in the
appeal, ultimately obtaining a concession by Ms. Cowan’s attorney that he
represented Carespring. ODJFS then lodged a jurisdictional objection, arguing that
Carespring did not have legal standing to sue, thus stripping the trial court of the
ability to hear the appeal. Ultimately, the trial court agreed with ODJFS, dismissing
the case for lack of jurisdiction. However, the trial court issued an alternative ruling
on the merits, affirming Ms. Cowan’s Medicaid denial on the basis that her property
exceeded the resource limit. Ms. Cowan now appeals, bringing three assignments of
error, challenging both of the trial court’s holdings.
1 We understand that, subsequent to the events described in this appeal, Ms. Cowan simply gave
the property away and ultimately became eligible for Medicaid. This appeal concerns her
eligibility prior to that time.
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OHIO FIRST DISTRICT COURT OF APPEALS
II.
{¶5} In her first assignment of error, Ms. Cowan attacks the trial court’s
conclusion that it lacked jurisdiction to hear the case. “Standing relates to a party’s
right to make a legal claim or seek judicial enforcement of a legal duty or right.”
Albanese v. Batman, 148 Ohio St.3d 85, 2016-Ohio-5814, 68 N.E.3d 800, ¶ 24. “It is
well established that before an Ohio court can consider the merits of a legal claim,
the person seeking relief must establish standing to sue.” (Internal quotation marks
omitted.) Moore v. Middletown, 133 Ohio St.3d 55, 2012-Ohio-3897, 975 N.E.2d
977, ¶ 21. And “[s]tanding is certainly a jurisdictional requirement * * * .” Bank of
Am., N.A. v. Kuchta, 141 Ohio St.3d 75, 2014-Ohio-4275, 21 N.E.3d 1040, ¶ 22. “[A]
party’s lack of standing vitiates the party’s ability to invoke the jurisdiction of a
court—even a court of competent subject-matter jurisdiction—over the party’s
attempted action.” Id.{¶6} Article IV, Section 4(B), of the Ohio Constitution provides that “courts
of common pleas and divisions thereof shall have such original jurisdiction over all
justiciable matters and such powers of review of proceedings of administrative
officers and agencies as may be provided by law.” (Emphasis added.) Thus,
standing may generally be acquired in two ways: (1) where a “party has alleged a
‘personal stake in the outcome of the controversy,’ ” (Internal quotation marks
omitted.) Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-
Ohio-5017, 979 N.E.2d 1214, ¶ 21; or (2) where a statute confers standing, Moore at
¶ 48. We review questions of standing de novo. See Moore at ¶ 20 (“Whether a party
has established standing to bring an action before the court is a question of law,
which we review de novo.”).
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OHIO FIRST DISTRICT COURT OF APPEALS
{¶7} Ms. Cowan primarily argues that Carespring enjoys statutory standing
pursuant to R.C. 5101.35. As relevant here, that statute provides that a Medicaid
“applicant, participant * * * [or] recipient * * * * who disagrees with an
administrative * * * decision * * * may appeal * * * to the court of common
pleas * * * .” R.C. 5101.35(A)(2) and (E). Ms. Cowan concedes that Carespring is not
a Medicaid applicant, participant, or recipient, but she nonetheless insists that,
under the Administrative Code, Carespring “[s]tands in the place of the individual.”
See Ohio Adm.Code 5160-1-33(B)(4); see also Ohio Adm.Code 5160:1-2-08(C)(1)
(“An individual may designate an authorized representative, in writing, to stand in
place of the individual and act with authority on behalf of the individual, as described
in rule 5160-1-33 of the Administrative Code.”). For its part, ODJFS counters that
the Administrative Code cannot impact the jurisdictional calculus because standing
can only derive from a statutory source. See Communications Workers of America,
AFL-CIO v. Pub. Utilities Commission, 57 Ohio St.2d 76, 77, 387 N.E.2d 230 (1979)
(“ ‘Unless a statute otherwise provides it is fundamental that no one can appeal from
an order (of the commission) to which he is not a party.’ ”) (Emphasis added.),
quoting Harrison v. Pub. Util. Comm., 134 Ohio St. 346, 347, 16 N.E.2d 943 (1938).
Thus, because Carespring does not meet any of the statutory definitions in R.C.
5101.35(A)(2) (applicant, participant, or recipient), ODJFS concludes that
Carespring lacks standing.
{¶8} The analysis becomes even more complicated when we look at Ohio
caselaw. The Eighth District recently addressed this issue, concluding that both the
state and federal Medicaid provisions give a nursing facility standing to sue in its
capacity as an authorized representative. See Tiggs v. Ohio Dept. of Job & Family
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OHIO FIRST DISTRICT COURT OF APPEALS
Serv., 2018-Ohio-3164, 118 N.E.3d 985, ¶ 28 (8th Dist.) (“[The nursing facility] had
authority to appeal to the trial court under R.C. 5101.35 * * * .”); Id. at ¶ 34 (“[W]e
cannot say that the trial court erred in its interpretation of 42 C.F.R. 435.923(b)(4)
when it found that [the nursing facility] * * * was able to represent [the resident] in
all Medicaid-related matters, including the appeal to the trial court.”). However, we
note that Tiggs affirmed a trial court’s decision that “relied solely upon a recent
federal court decision, Doctors Nursing & Rehab. Ctr. v. Norwood, N.D.Ill. No. 1:16-
cv-9837, 2017 WL 2461544 (June 7, 2017).” Id. at ¶ 20. Muddying the waters
further, Norwood only addressed standing with respect to federal law, and it has
since been effectively overruled by the Seventh Circuit. See Bria Health Serv., LLC v.
Eagleson, 950 F.3d 378, 383 (7th Cir.2020) (“[T]he text of the regulation, the
broader regulatory context and purpose, and the comments during rulemaking all
indicate that ‘matters with the agency’ relate only to communication and document
processing in interactions with the agency and do not reach civil litigation against
it.”). Similarly, Bria Health Services only addressed the federal provision, shedding
little light on whether Ohio law conveys standing to authorized representatives.
{¶9} At this point, however, we need not decide whether to follow Tiggs
because, while we appreciate the parties’ arguments, we ultimately find them
misguided. “Standing here is intertwined with Civ.R. 17(A)’s requirement that every
action ‘be prosecuted in the name of the real party in interest.’ ” Wells Fargo Bank,
N.A. v. Freed, 3d Dist. Hancock No. 5-12-01, 2012-Ohio-5941, ¶ 21, quoting Civ.R.
17(A). See Self Help Ventures Fund v. Jones, 11th Dist. Ashtabula No. 2012-A-0014,
2013-Ohio-868, ¶ 19 (“Standing is similar to the requirement in Civ.R. 17(A) that
every action ‘shall be prosecuted in the name of the real party in interest.’ ”). Of
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OHIO FIRST DISTRICT COURT OF APPEALS
course, some exceptions exist, such as when a guardian sues on behalf of a minor,
but in the guardian’s own name. See Civ.R. 17(B); R.C. 2111.17 (permitting guardians
to “sue in the guardian’s own name, describing the guardian as suing on behalf of the
ward.”).
{¶10} Perhaps Ms. Cowan is correct that R.C. 5101.35 and Ohio Adm.Code
5160-1-33 would similarly permit Carespring to sue in its own name, on her behalf.
But we need not decide this question because that’s not what happened here. It is
undisputed that Ms. Cowan pursued this case from the outset in her own name.
Carespring has never appeared as a party on any case notice, brief, or document.
This procedural history stands in contrast with Tiggs, where the nursing facility was
named on the appeal. See Tiggs (listing the case caption as “Persey Tiggs C/O Indian
Hills Healthcare Group, Inc. v. Ohio Department of Job and Family Services”). We
further note that, contrary to the trial court’s conclusion, the attorney never
disclaimed representation of Ms. Cowan at one of the hearings. A review of the
transcript shows that the attorney indicated he “represent[ed] Carespring * * *,
authorized representative for Mary Cowan, the appellant.” This statement does not
disavow representation of Ms. Cowan. Nor does it contradict the attorney’s repeated
representations throughout the case that he represented Ms. Cowan. Both can be
true. Carespring may have procured the attorney’s services, but in her authorized-
representative form, Ms. Cowan expressly permitted Carespring to hire an attorney
to represent her.
{¶11} Thus, even if Carespring pulled the marionette strings behind the
curtain, only Ms. Cowan appeared as a party before the court of common pleas and
this court. As a result, we have no basis for questioning her standing. Perhaps
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OHIO FIRST DISTRICT COURT OF APPEALS
issues could arise regarding whether Ms. Cowan authorized Carespring to hire an
attorney to represent her, but ODJFS does not broach such matters here. See Peck v.
Ohio Dept. of Job & Family Serv., 11th Dist. Geauga No. 2018-G-0152, 2018-Ohio-
2353, ¶ 19 (“Although the issue has been presented in terms of standing, we agree * *
* that the issue is not whether [the nursing facility] has * * * standing to bring the
appeal * * * * [t]he issue is * * * whether [it] was duly authorized by [the resident] to
file on her behalf.”). We conclude that the trial court erred by concluding that it did
not have jurisdiction over this case and therefore sustain Ms. Cowan’s first
assignment of error.
III.
{¶12} Success on the first assignment of error, however, does not necessarily
spell reversal. In her second assignment of error, Ms. Cowan challenges the trial
court’s alternative holding—that the value of her two plots of land exceeded
Medicaid’s resource limit. She reasons that the parcels should not have been
counted because she could not liquidate them, essentially because no one wanted to
buy them. We nevertheless conclude that her property constituted a countable
resource because Ms. Cowan had the legal authority to sell them, regardless of how
difficult or easy the task at hand.
{¶13} Ohio Adm.Code 5160:1-3-05.1(A) “describes how resources are treated
for purposes of determining eligibility for medical assistance.” Id. And the
“maximum combined value of all [countable] resources an individual can have an
ownership interest in and still qualify for medical assistance * * * is two thousand
dollars.” Ohio Adm.Code 5160:1-3-05.1 at (B)(8) and (C)(1). “Resources” are
defined as “cash, funds held within a financial institution, investments, personal
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OHIO FIRST DISTRICT COURT OF APPEALS
property, and real property an individual * * * [1] has an ownership interest in, [2]
has the legal ability to access in order to convert to cash, and [3] is not legally
prohibited from using for support and maintenance.” Id. at (B)(7), referencing Ohio
Adm.Code 5160:1-1-01(B)(72). Only the second element is in dispute here—whether
Ms. Cowan had the legal ability to access the two parcels of land.
{¶14} Emphasizing pragmatism, Ms. Cowan contends that the inability to
procure a willing buyer essentially meant that she did not have the legal ability to
access her property. For support, she points to a federal regulation, 20 C.F.R.
416.1201, which provides in relevant part: “If a property right cannot be liquidated,
the property will not be considered a resource of the individual (or spouse).” 20
C.F.R. 416.1201(a)(1). Using the federal regulation as a springboard, Ms. Cowan
maintains that without a willing buyer, she did not have “the legal ability to access in
order to convert to cash.” See Ohio Adm.Code 5160:1-3-05.1(B)(7) and 5160:1-1-
01(B)(72).
{¶15} The first problem with Ms. Cowan’s pitch is that 20 C.F.R. 416.1201
deals with SSI determinations, a federal obligation. And Ohio courts considering
similar arguments have squarely rejected the grafting of 20 C.F.R. 416.1201 onto
Medicaid eligibility, which represents a state responsibility. See 20 C.F.R. 416.2116
(providing that the Social Security Administration may assist states in making
Medicaid eligibility determinations, but only if the state requests); Underwood v.
Ohio Dept. of Job & Family Serv., 11th Dist. Geauga No. 2019-G-0215, 2019-Ohio-
4924, ¶ 29 (holding “20 CFR 416.1201 inapplicable to determining Ohio Medicaid
eligibility”); Communicare v. Ohio Dept. of Job and Family Serv., 8th Dist.
Cuyahoga No. 106874, 2019-Ohio-3757, ¶ 14–15 (same).
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OHIO FIRST DISTRICT COURT OF APPEALS
{¶16} The second problem is that Ms. Cowan’s interpretation pays little
fidelity to either the plain language of the regulation or to Ohio caselaw. The plain
meaning of “legal ability to access” precludes an exemption for impracticability. And
confirming this view, we note that the Administrative Code previously allowed for
such an exemption: “If an individual owns property that affects eligibility and the
property has not been sold, it will not be counted as an available resource as long as
the individual continues to list the property for sale at an amount equal to the market
value determined by the county auditor.” Former Ohio Adm.Code 5160:1–3–
05.1(C)(6)(a) (Effective 1/15/2015). But that provision was repealed in August 2016.
Interpreting the current language in the Administrative Code, the Eighth District has
concluded that if the applicant has the legal authority to sell the property, the plain
language of the Code renders it a countable resource (assuming, of course, that some
other exclusion does not apply). See Communicare at ¶ 13 (“Whether [the applicant]
was able to find a purchaser is a wholly different consideration from what the
regulation contemplated, namely whether [the applicant] had the legal authority to
sell the properties in the first place.”). Based on a plain reading of the Administrative
Code, we agree with that interpretation.
{¶17} For these reasons, we conclude that the trial court correctly
determined that Ms. Cowan’s two plots of land were countable resources. She has
presented no legal impediment to her ability to sell those properties, and we decline
to read an impracticability exception into the Administrative Code (that was recently
rejected). We therefore overrule Ms. Cowan’s second assignment of error.
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IV.
{¶18} Ms. Cowan finally argues that the trial court erred in affirming
ODJFS’s denial because Ohio’s Medicaid scheme is invalid. She argues that Ohio’s
Medicaid regulations are invalid because the state never obtained approval from the
Centers for Medicare and Medicaid Services. However, Ms. Cowan cites to no
authority, or to anything in the record, supporting her assertion that Ohio’s Medicaid
plan is noncompliant, and we decline to speculate on this point. We therefore
overrule her third assignment of error.
* * *
{¶19} In light of the foregoing analysis, we sustain Ms. Cowan’s first
assignment of error, overrule her second and third assignments of error, and affirm
the judgment of the trial court.
Judgment affirmed.
MYERS, P. J., and CROUSE, J., concur.
Please note:
The court has recorded its entry on the date of the release of this opinion
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